Written by
Dr. Amy K. Glasmeier
on
05/20/2015

Recent announcements of an increase in the minimum wage in cities across the U.S. are hopeful signs that local wage rates are coming to reflect closer estimates of the cost of living in key markets around the country such as Boston, Seattle, San Francisco, Chicago and the recently announced increase in Los Angeles, CA. As reported in the Los Angeles Times (LA Times) last night:

The nation’s second-largest city voted Tuesday to increase its minimum wage from $9 an hour to $15 an hour by 2020, in what is perhaps the most significant victory so far for labor groups and their allies who are engaged in a national push to raise the minimum wage

Like the majority of changes in local minimum wages, these increases in income roll out slowly over time to provide employers with the ability to adjust their business operations in support of higher wages. The LA Times recounts the expected wage rate increase rollout in the city will occur over five years:

The 67 percent increase from the current state minimum will be phased in over five years, first to $10.50 in July 2016, then to $12 in 2017, $13.25 in 2018 and $14.25 in 2019. Businesses with fewer than 25 employees will have an extra year to carry out the plan. Starting in 2022, annual increases will be based on the Consumer Price Index average of the last 20 years. The City Council’s vote will instruct the city attorney to draft the language of the law, which will then come back to the Council for final approval.

(see above link to access article)

The great news accompanying the Los Angeles decision will be reflected in changes in the Living Wage Calculator on an annual basis to reflect the increments specified in the new policy. To track changes in the minimum wage, we make adjustments in the tool every January. For up-to-date information about minimum wages, we will periodically post notices when cities, counties or other localities adjust their minimum wages.